Introduction to markets - OCR A-Level Economics (H460) overview
An overview of the introduction-to-markets module of OCR A-Level Economics (H460), covering scarcity and choice, the production possibility frontier, economic systems and efficiency, demand and supply, and the four elasticities, and how this microeconomic foundation is examined.
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The introduction-to-markets module of OCR A-Level Economics (specification H460) is the microeconomic foundation of Component 1. It builds the toolkit (scarcity, choice, demand and supply, and elasticity) that the rest of microeconomics relies on. This page maps the dot points and how they are examined.
The dot points in this module
- Scarcity, choice and the economic problem
- The basic economic problem of finite resources and infinite wants, opportunity cost as the next best alternative forgone, the four factors of production (land, labour, capital and enterprise) and their rewards, and the difference between positive and normative statements.
- Production possibility frontiers
- The PPF as a model of scarcity, choice and opportunity cost; points on, inside and beyond the curve; why the curve is bowed outward; and the difference between a movement along the curve and a shift representing growth or decline.
- Economic systems and efficiency
- Free-market, command and mixed economies; the rationing, signalling and incentive functions of the price mechanism; and allocative, productive and dynamic efficiency.
- Demand, supply and the price mechanism
- The determinants of demand and supply, movements versus shifts, market equilibrium and disequilibrium (surpluses and shortages), and consumer and producer surplus.
- Elasticities of demand and supply
- Price, income and cross elasticity of demand and price elasticity of supply: how each is calculated and interpreted, what determines it, and the link between PED and total revenue.
How this module is examined
OCR Economics is a two-year linear course with three papers at the end. This module is examined mainly in Component 1 (Microeconomics), an 80-mark, 2-hour paper using data-response questions and a chosen extended-response essay of up to 25 marks. The content also appears synoptically in Component 3 (Themes in economics), the unseen-theme paper. Higher-mark questions are marked by levels of response, rewarding accurate diagrams and balanced evaluation.
How to study this module
- Master the diagrams. Demand and supply, the PPF and surplus diagrams recur constantly; practise drawing and labelling them accurately.
- Drill the elasticity formulas. Be able to calculate and interpret PED, YED, XED and PES under timed conditions, and link PED to total revenue.
- Distinguish movements from shifts. This is one of the most penalised errors; always check whether the cause is the good's own price or a non-price determinant.
- Use real examples. Energy prices, housing supply, tobacco duty and surge pricing make application marks easy.
Work through the dot points
Each dot point has its own focused answer page with worked exam questions and cross-links: scarcity, choice and the economic problem; production possibility frontiers; economic systems and efficiency; demand, supply and the price mechanism; and elasticities of demand and supply.
For the official specification
OCR publishes the full specification (H460), past papers and mark schemes at ocr.org.uk. Always revise from the current specification and OCR's own past papers, because the question style and the levels-of-response mark schemes are board-specific.
Sources & how we know this
- OCR A Level Economics (H460) Specification — OCR (2023)